Options and money managment

Hi ALL,
I am newbie in options play,
I'd love to hear from experienced options traders, how do they use stops in their play.
I do know how to use stops in regular trading, but kinda confused how you can use it in options.
Let's say today is November and you think stock is going up, you see some retracement and then you think ah, ok we on the nice level of retracement and you bought January call 60 when stock trading in 63 for 4.5 per contract. Now stocks moves down and stops at 60 , your contract now worth 3.7.
Would you stop out at 4.1, 4.0 or 3.9, or would you wait, having almost two month to prove you wrong?
It's very hard to predict the bottom of any retracement.
How would you do it in limit order or market order?
Let's have stock symbol FSH in this example.
I know it's easy to say, I believe it will go higher, but eventually market is always right.
So how do you manage you trade?
Thank you for any tip.

I suggest you use technical stops on the underlying stock. When you go long the option, decide at which stock level you'll close out the option (both stop-loss and profit target).

You should also use some time rule. If after X days, the stock doesn't move in your favor, close out the option as well.

Never use market orders in options, always limit.

Quote from ADLE:

Hi ALL,
I am newbie in options play,
I'd love to hear from experienced options traders, how do they use stops in their play.
I do know how to use stops in regular trading, but kinda confused how you can use it in options.
Let's say today is November and you think stock is going up, you see some retracement and then you think ah, ok we on the nice level of retracement and you bought January call 60 when stock trading in 63 for 4.5 per contract. Now stocks moves down and stops at 60 , your contract now worth 3.7.
Would you stop out at 4.1, 4.0 or 3.9, or would you wait, having almost two month to prove you wrong?
It's very hard to predict the bottom of any retracement.
How would you do it in limit order or market order?
Let's have stock symbol FSH in this example.
I know it's easy to say, I believe it will go higher, but eventually market is always right.
So how do you manage you trade?
Thank you for any tip.